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New Jersey Corruption Bust Had Deep Roots

Arrests Following a Series of Investigations Make Official Malfeasance a Central Issue in This Year's Gubernatorial Campaign

By

Suzanne Sataline

Updated Aug. 28, 2009 12:01 a.m. ET

OCEAN TOWNSHIP, N.J. -- A statewide corruption investigation that has entangled dozens of New Jersey politicians had its origins a decade ago inside a dingy trailer office in Monmouth County, where federal agents overheard talk about bribes to local officials, some involving real-estate deals.

The wiretaps of phones in the trailer eventually led to the arrests and convictions of a half-dozen public officials and sparked two other probes that have since ensnared nearly 80 politicians, most of them Democrats, and fixers, businessmen and others. The key figure in last month's dramatic arrests of 44 people, real-estate developer Solomon Dwek, first came to investigators' attention through his connections with officials ultimately convicted in Monmouth County, according to a person in law enforcement familiar with the case.

The three-round investigation -- referred to by prosecutors as Bid Rig I, II and III -- has catapulted corruption into a central issue in this year's gubernatorial race. Presiding over most of the investigations was Chris Christie, a Republican who served as U.S. attorney for New Jersey from 2002 until December, when he resigned to run this fall against Democratic Gov. Jon Corzine.

For many, Bid Rig has reinforced New Jersey's reputation as a cesspool of corruption, where multiple layers of government officials wield vast power and their friends and family get jobs and contracts. This behavior isn't limited to New Jersey, of course, but the large number of high-level officials arrested in the state in recent years has underscored the perception that it is entrenched here.

A man identified as Daniel Van Pelt, a New Jersey assemblyman, shields his face as he leaves a Newark, N.J., courthouse in July after being one of more than 40 people arrested in a corruption probe. Mr. Van Pelt later resigned but said he hoped to prove himself worthy of the public trust.
Reuters

"The further you get away from New Jersey, they can't conceive that there's a state where they allow this kind of stuff to go on," said Bob Ingle, a former reporter and chronicler of New Jersey corruption through a Web site and a book he co-wrote, "The Soprano State."

The first Bid Rig began in 1999, when Robert Steffer, a former contractor and a longtime Federal Bureau of Investigation informant, wore a wire and visited the Neptune trailer of Philip Konvitz, a Monmouth County power broker, said Mark McCarren, an assistant U.S. attorney who has prosecuted individuals in every stage of Bid Rig.

Mr. Steffer told people he was looking for contracting work and was willing to pay local officials to refer him any jobs. In truth, he was listening for evidence that public officials were taking bribes, according to Mr. McCarren.

"We had multiple sources indicating Konvitz was a guy who dealt in corrupt ways with local officials...and he did so out of this little business -- a converted trailer," Mr. McCarren said. Mr. Konvitz, he said, was "worth hundreds of millions." Mr. Steffer couldn't be reached for comment.

Mr. Konvitz, who died in 2005 at age 95, had a reputation in Monmouth County as a fixer with powerful friends. "He was just like the Godfather; when you wanted to get something done, he was the guy who could tell you how to get it done," said Elmer Kendrick, an Asbury Park used-car dealer who said he had owned a piece of property with Mr. Konvitz.

Listening to wiretaps, agents heard Mr. Konvitz persuading Terrance Weldon, the former mayor of Ocean Township, to change zoning on a tract of land, increasing its value, according to federal court documents.

Mr. Weldon pleaded guilty in 2002 to extorting bribes, including one for $50,000 from that land's developer, accepted weeks after Mr. Weldon voted for the zoning change. The former mayor became a cooperating witness for the government but received a prison sentence of more than four years.

Mr. Konvitz was indicted in 2002 on charges of extortion, bribery and mail fraud, including the transaction with Mr. Weldon. A judge dismissed the charges after Mr. Konvitz was declared unfit to stand trial.

Around 2000, agents investigating the Weldon case also learned that Mr. Dwek, a local Jewish day-school educator and real-estate magnate, had close ties to Ocean Township officials, especially Mr. Weldon, the person familiar with the investigation said. Mr. Dwek paid bribes to several politicians in Monmouth County, including more than $10,000 to Mr. Weldon, as he sought approvals for some of his property, the person said, although Mr. Dwek was never charged for these alleged incidents. Mr. Dwek's lawyer hasn't returned numerous calls seeking comment.

A tip to federal agents in 2002 led to the second stage of Bid Rig. Police in the Monmouth County borough of Keyport learned that a local trash hauler, under investigation for double billing, was being shaken down for business favors by a councilman, according to Tom Mitchell, now Keyport's police chief, who was involved in the investigation. Mr. Mitchell said he shared the information with the FBI, which again dispatched Mr. Steffer.

Mr. Steffer began in 2003 offering bribes to local officials while posing as a wealthy contractor and loan shark with mob ties. Fifteen current and former officials in Monmouth County were arrested in 2005, including John Merla, the Keyport councilman who had become mayor in 2003. Mr. Merla in 2007 pleaded guilty to federal charges of extorting bribes in exchange for awarding no-bid contracts.

Bid Rig's latest chapter kicked off in 2007, with the help of Mr. Dwek. A year earlier, Mr. Dwek had been charged with bank fraud, after he cashed a $25 million bad check at a drive-through teller. Agents recognized his name from the earlier investigations. In debt, and facing prison, Mr. Dwek was persuaded to become a confidential informant, people familiar with the matter say.

Posing as a developer, Mr. Dwek began offering money and campaign donations to North New Jersey politicians and operatives, in exchange for special consideration for his supposed real-estate projects, according to people familiar with the case. The undercover work led to the arrest of 44 people in July, including mayors, rabbis accused of money laundering and a New York City man accused of trafficking human organs. Trial dates haven't been set.